International development aid was once defined to me as money given by poor people in rich countries to rich people in poor ones.

The majority of the "bottom billion" of the world's population live in Africa, which, until buoyed by the recent commodity boom, had seen an absolute decline in most of its indicators of human development. Donors are estimated to have sunk well over $500bn into the continent in recent decades with no discernible result on poverty reduction.

However, rich Africans are well represented on the lists of the world's wealthiest people. And the image that much of the development aid delivered to poor countries is simply stolen by their political elites is a strong one. A report published by the Independent Commission for Aid Impact (ICAI) warns that the rapid expansion of Britain's international aid programme has left it increasingly at risk from corruption and fraud.

Most aid to poor countries comes from western government donors, who either provide it directly through bilateral assistance or channel it through international institutions, such as the World Bank and UN agencies. An increasing amount is also now being delivered by non-governmental organisations (NGOs), which raise some of their money from public appeals, and receive the rest in grants from governments and multilateral donors.

There is a simple correlation between how these organisations are able to assess any given crisis, and their efforts to ensure that the money gets where it's needed and the probable success of their fundraising efforts. No one likes to give money that will be spent on administrative overheads or expensive expatriate salaries, and so most organisations keep these pared to the minimum.

There is consequently little career structure in the humanitarian relief industry, whose field staff tend to be quite young and inexperienced. However, in one of its strongest criticisms, the ICAI report cited one occasion when pressure from the Department for International Development and other donors to minimise management costs led to an NGO not having enough staff or knowledge about the fraud-related risks to which its spending was exposed.

The report also noted that the British government's decision to channel a greater proportion of its aid budget into "fragile and conflict-affected states" will "inevitably expose the UK aid budget to higher levels of corruption risk". Humanitarian aid, in particular, is often delivered in situations where systems of national democracy and accountability are weak and problems of corruption consequently greater. The example of Afghanistan, where millions has been squandered in futile counter-insurgency operations, provides a particularly stark example of what can go wrong.

This is not, however, to dismiss the current government's efforts. The decision to increase Britain's aid budget at a time of general austerity is a brave one, and targeting fragile states has a certain logic.

Politically it is easier to convince a sceptical British public that aid, as well as being an altruistic act, should be used to reduce the threats of spill-over crime, violence and terrorism that are associated with conflict zones. Economically, it makes some sense to concentrate resources.

Paul Collier, former director of development research at the World Bank, who coined the "bottom billion" phrase, warns that the poorest countries in the world are caught in a number of "traps" because poverty, corruption and conflict feed on one another and conspire to keep poor countries poor.

Breaking out of these traps will require a considerably larger scale of investment than they have received to date. However, the idea that all this money will be spent wisely may turn out to be a triumph of hope over experience.